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U.S. considers tariffs on more Chinese chemicals

Numerous basic inputs may be hit with a 10% import tax as trade war intensifies

JULY 13, 2018 | APPEARED IN VOLUME 96, ISSUE 29

The U.S. has ratcheted up the trade war with China with the release of a long list of Chinese-made commodities, worth $200 billion in total, targeted for a 10% tariff. Numerous organic and inorganic chemicals are on the list.

The U.S. move is a reaction to China’s decision on July 6 to push ahead with a 25% tariff on $34 billion worth of U.S. imports, including many plastics. The Chinese action, in turn, was a response to an earlier U.S. decision to add a 25% tariff on $50 billion worth of Chinese goods. Those products were announced in two groups—worth $34 billion and $16 billion, respectively—in April and June.

The U.S. says its actions aim to force China to change predatory practices in technology transfer, intellectual property, and innovation.

Because China is both a major market and a key supplier, the trade row will have a profound impact on the U.S. chemical industry. China imports billions of dollars worth of U.S.-made plastics every year, and they are now less competitive because of the 25% tax added to their price. The country is also a major supplier of competitively priced basic chemicals that are widely used in the pharmaceutical and agrochemical industries.

“The Administration’s announcement of a potential 10% tariff on $200 billion of additional imports from China, including a significant amount of chemicals, is a stunning and unfortunate development for U.S. manufacturers and consumers,” the American Chemistry Council, a trade group, said in a statement.

Some U.S. companies that buy materials from China appear unconcerned, so far. The paint manufacturer PPG Industries, which sources some of its urethanes from the Chinese firm Wanhua Chemical, tells C&EN that “since a majority of the paint and coatings products produced by PPG are often made, sold, and used in that same territory, this minimizes any impact that tariffs would have.”